Being asked whether or not he would be offended by the comedian's planned sketch which was set to spoof his sci-fi, James Cameron says, 'If they want to poke fun at 'Avatar' Sunday, that's OK by me.'

James Cameron has given Sacha Baron Cohen the green light to mock his blockbuster "Avatar" at the upcoming Oscars - despite Academy Award organizers scrapping the sketch over fears it would offend the director. Cohen was initially the favorite to host the annual bash on March 7, but bosses feared he would be too risque for American audiences, and opted for Alec Baldwin and Steve Martin instead.

But producers were keen for Cohen to bring some humor to the event, and asked him to present an award to one of the night's winners. However, after Oscar producers saw the ideas for his sketch, which reportedly included the comic dressing as a blue-skinned female "Avatar" creature who proclaims she is pregnant with Cameron's child, the skit was axed to save the director from embarrassment.

But the "Titanic" moviemaker is adamant he will take any joke aimed at his film in good spirits. He tells E!Online, "I don't know anything about that. I don't produce the Oscars. If they want to poke fun at 'Avatar' (on) Sunday, that's OK by me. The Oscars are a celebration of movies ... even the gaffes and out of bounds stuff are all part of the fun."